Land owners to be asked to submit bids for liquor store property

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In Saturday’s Nfld News:

Too often, said Interim City Administrator Joel Walinski, when property owners know government entities are looking at their land, prices soar. By asking land owners to submit proposals to the city, Walinski said, it’s hoped that prices will be more favorable to the city… Walinski said it will take a few weeks for the staff to complete a request for proposals, but expects the notice to be advertised by month’s end. Land owners whose property was ranked favorably by the consultant will be contacted and ask to submit a proposal to the council. 

This seems like a smart move to me. Anyone know what Arnie Nelson’s objections were?

22 thoughts on “Land owners to be asked to submit bids for liquor store property”

  1. Kudos to Mr. Wallinski for thinking “outside the box” on asking land owners to submit bids. Hopefully we will see landowners whose land was not previously considered putting in bids.

    Over the past several months I have spoken with many Northfielders who are in favor of a new liquor store and just as many folks who are opposed to a new store or for the City to be in the liquor business at all.

    Perhaps there should be a question on the ballot this fall letting the citizens vote on the matter;

    a) Should the City of Northfield Continue to operate a municipal liquor store?
    b) Should the City of Northfield invest in the development of a new Liquor Store?

    Personally I do not care one way or the other if the City runs a municipal liquor store or not. However I am not convinced that now is the time to spend $1M+ on a new facility. Perhaps we should take a look at building an all-emcompassing City Facility that includes City Hall / Liquor Store / Fire Station / Police Station / Library / Rec Center. I know it would be rather expensive but the longer we wait the higher the costs will be.

  2. Perhaps there is value to this approach if other land owners come forward with properties that the City had not considered and turns out to be a better property than those being considered, but otherwise I don’t quite understand the logic as it was stated.

    The city can ensure that it only pays a fair market price by having the tool of condemnation (eminent domain) in its pocket. If the parties cannot agree on the fair market price, then the City can take the land and a judge will use appraisers to determine its true market value.

    A landowner cannot arbitrarily increase its price beyond fair value unless the City agrees to pay an above market price…which one hopes they are smart enough not to do.

    There must be some detail missing in this story….but, Arlen is right that the better question is whether the City should be in the liquor-selling business.

    As discussed in another forum, maybe its better to try to license the exclusive right to sell off-site liquor to a private company and not take the capital or business risk that running it as a municipality incurs.

  3. David K: The state legislature has seriously curtailed the right of eminent domain to prevent government entities from using the power of eminent domain to not pay the price requested by the landowner. The Best Buy case was a blatant example of the misuse of the power.

    I don’t think eminent domain would apply in this case given that the liquor store does not need to be moved to continue to serve the public good.

    The question of whether the City should be in the liquor business should be an economic decision, not a moral decision.

  4. David L, I agree on your point about moral vs economic decision to an extent. However, the two are not inseperable unless you believe that your values do not impact your economic decisions.

    I am morally neutral, or perhaps even a bit skeptical, about whether the City can “more ethically” sell liquor than a private entity.

    However, I do believe that the City is likely to be able to gain a better “risk-adjusted return” on the right to sell off-site liquor in Northfield by licensing an exclusive or semi-exclusive right to do so to a private company. I don’t understand why the council is not also asking for bids from private companies for this right at the time they ask for “offers” to sell the City land.

    On your other point…didn’t the Supreme Court grant extensive eminent domain rights to government’s just last year, or the year before, even allowing them to take land without cause as long as fair compensation was provided?

  5. David K., are you referring to the Kelo case from ’05? If so, not applicable here. We’re talking about a publicly owned municipal liquor store, not a taking by a private entity for a private purpose. Very different issues. And the issues in Kelo are very complicated to understand and even more difficult to apply to a wholly unrelated, separate set of facts.

    This is one of those areas where I must agree with David L. I’m not very experienced in condemnation matters, but my understanding of Minnesota law is that localities can condemn property only to provide housing or eliminate blight. That is the legislative change made at the state level in the wake of the Kelo case.

    (You can’t always believe everything you read on the internet, even when your source is a newsletter by Larkin Hoffman!)

    A better resource for understanding eminent domain law in Minnesota is produced and maintained by the legislature.

    http://www.leg.state.mn.us/lrl/issues/eminentdomain.asp

  6. Britt, Kelso may be that case….just going from recollection and time flies when your kids are young! It would make sense that the state legislature would respond to that case with changes locally…thanks for the update.

    I found this helpful link (after your reply) for anyone interested: Resources on Minnesota Issues: Eminent Domain.

    From that page it says “The law states that “eminent domain may only be used for a public use or public purpose”, and further clarifies that the “public benefits of economic development, including an increase in tax base, tax revenues, employment, or general economic health, do not by themselves constitute a public use or public purpose”. ”

    It seems, though, that the requirement is not “only to provide housing or eliminate blight”, but that other purposes are allowed, including “(1) the possession, occupation, ownership, and enjoyment of the land by the general public, or by public agencies;”

    I’m not a lawyer, but (1) above seems pretty broad. Could not a municipal liquor store not be considered a public agency or is ownership by the city considered ownership by the general public?

    Interested to know if you or David L have seen any cases decided on this since the new MN law was put into place.

    Regarding compensation for a taking, the law still seems to drive towards a fair-market price in the event of taking, determined by either negotiation, appraisals or by the court.

  7. David K: Regarding the value judgment of the City selling alcohol (or tobacco), I don’t see a difference in the City selling it or having a private person sell it. If selling alcohol is “bad”, then everyone should be prohibited from doing it.

    The ethical question is whether it is fair to private business to have a City monopolize this business. Clearly, right now, it is an unfair competitive market.

    The economic question is whether the City can make more money running the business itself or selling the business and “investing” the money. The problem with selling the liquor store is that selling the liquor store means selling an revenue stream. If the money is used to build a new public building, the City will have converted an revenue stream into an expense stream.

    Perhaps the City should consider putting the liquor store out on Highway 19. The revenue stream could be used to pay for the infrastructure costs, and the building.

  8. Apropos the supposed requirement of 35 parking spaces for the new liquor store site, how often have any of you not been able to park on, or very near to, the current liquor store site when you have shopped there?

  9. Norman –

    I have noticed that the consultants from the suburbs seem to bring the conventional model requiring substantial numbers of dedicated parking spaces as part of their business plans. They have driven many a business out of downtown and to greener fields of less challenging development.

    Personally, I often think of picking up that romantic bottle of red at the last minute, right after I get off work and am heading home. So, I would think that I make my purchases at about peak time, say between 5 and 6 pm. In the nineteen years that I’ve been shopping at the store, I think I’ve had to wait for some one to pull out of a parking space before I could pull in maybe a total of two or three times. This includes such pre-holiday events such as the day before Thanksgiving and Christmas Eve.

    I think that most people visiting the liquor store know what they want, where it is located, and are in and out of the facility in just a few minutes. It doesn’t make much sense to me to create parking spaces that are going to be very rarely, if ever, used.

    Furthermore, I’ve heard that some communities now make plans so that people park once and can shop at several different places. The result is reduced gas consumption and increased neighborhood sales.

    – Ross

  10. The whole resurgent boom in Northeast Mpls along Henn Ave occurred because 3 key historic buildings were renovated and not torn down for add’l Surdyks parking (I’m sure now even Surdyks would agree the parking lot plan was flawed)

  11. I hear several points made about the Muni that I believe are questionable:

    1) “The Muni is intended as city revenue.” This is historically false as the city has a retail monopoly on liquor to “control” the sales not to “profit” from the sales.

    2) “A bigger liquor store will just allow Northfield to take back sales lost to other communities.” This may be partially true but what is absolutely true is that a bigger store will mathematically create more alcohol users in Northfield and thus more alcoholics, more DWIs, more domestics, etc. Any retail that is expanded in Northfield from 2500 sq ft to 7500 sq ft (be it the bead store, the historical society gift shop or the liquor store) is going to create more local awareness and demand and increase the average citizen use.

    3) The bigger liquor store is a safety issue for employees. A small liquor store can be made safe for employees. A big liquor store will harm some Northfield citizens (see point 2) – one can argue that this harm is worth the tax revenue increase but one should not pretend there will be no additional harm as this is burying our hands in the sand – we have ‘a Muni’ because alcohol does cause harm.

    4) Town X has a bigger liquor store. This is like saying “Billy’s mom lets him stay up later.” So what … many communities allow businesses that would be deemed incompatible with Northfield.

  12. David: I disagree–the muni is certainly intended to provide revenue, in addition to controlling through monopolization the sale of alchoholic beverages.

    The question that the citizens of Northfield have to decide is whether it is more important to generate revenue or to control the sale of alchohol. You obviously want to control the sale of alchohol–which is a very worthy goal. Others may think it is more important to generate revenue.

    I agree that safety is of the utmost importantance and should be considered when determining what type of “muni” to build.

    The basic question comes back to whether or not the citizens of Northfield want to go all out MGM style mega-liqour store on the highway. Or do you want a smaller store that discourages everybody from everywhere driving to Northfield to pick up their beer but provides good choices for those within the Northfield area? (And so keeps the local citizenry from shopping elsewhere.) I like beer and wine, and I like the idea that the City of Northfield may benefit from my buying something I would have bought somewhere else if the muni didn’t exist.

    I would really like to see the muni stay downtown. I still think that Northfield should table the muni move until some of their other problems are under control. (Including spending a million bucks to have a nicer city hall.)

  13. Jane – I think the point that needs discussion is that a bigger store will by definition increase use and thus increase the very real negative impacts of use on some men, women & children. These costs are well understood and mathematical. How much city revenue justifies subjecting someone to an alcoholic spouse, a domestic abuse or being hit by a drunk driver ? Let’s make our choices based on reality … a great deal of liquor store revenue comes from heavy users and brings a heavy toll.

  14. David H:

    I disagree with your assertion that “a bigger store will by definition increase use…” I would think that a bigger store would offer greater variety at lesser cost to consumers, therefore increasing ability to compete with neighboring retailers.

    I assume that you are using basic principles of supply and demand to come to this conclusion. If the “supply” were limited vis-a-vis having no liquor store in Northfield, why wouldn’t people just go to Dundas? You can get off-sale at any bar in Dundas, Castle Rock, Farmington, etc.

    Even people with no motorized transportation can get 3.2 at any gas station in town, regardless of whether we have a muni.

    Your conclusion that “A great deal of liquor store revenue comes from heavy users and brings a heavy toll” may or may not be accurate, I don’t know. But wouldn’t those allegedly “heavy users” just go to Firehouse and get their booze?

  15. Britt – maybe we should get a beer and talk about this 🙂 (eg. I’m not a 100% teatoller). I agree that it’s hard to make community policy in a vacuum – in this case meaning when the surrounding culture in so immersed in alcohol but a Muni does offer some control. A bigger liquor store has to market itself and create local market share. The problem is some number of citizens that don’t use or use very little will by virtue of visibility be pushed into heavier use. I’m certain this can be proven mathematically. I agree that current heavy users will get the booze somewhere and this might end up being business Northfield captures – do you want to ? You seem very bright, do you really think there will be no increased use in Northfield if the Muni were moved to a bigger more visible location on Hwy 3 ?

  16. David Henson: I absolutely disagree that a larger liquor store will mean proportionately more alcoholics. Alcoholics do not need variety. I think a mega liquor store on Highway 19 set up to attract more “drive by” business might supply more alcoholics who find it conveniently located, but I do not think it will in any way shape or form make more alcoholics.

    I think that the size of a new muni should be based on serving the local community, including those that work in Northfield and would stop for their wine selection before heading home. I do not think it would be good to try to attract all the drive-by business–let them go to Apple Valley or Faribault (or dare I say?–Dundas.) Serve the local community.

    I think a muni does help control and reduce consumption by limiting the choices and NOT making it all that convenient versus having a liquor store on every corner.

  17. I left the land of 10,000 lakes and was posting while checking my email from the land of 10,000 bars (WI). I won’t repeat it again but I think making the liquor store a focal point for Northfield on Highway 3 is not right message.

  18. In today’s Nfld News: OSHA: Buy land for a liquor store, or else.

    The Occupational Health and Safety Administration has given the city a little more than six months to pick a new liquor store site or make $125,000 in repairs to its Fifth Street store, built in 1957.

    Human Resources Director Elizabeth Wheeler, in a Sept. 10 memo to city councilors, reported that OSHA wants Northfield to have a deed to a site, approved building plans and a “firm date to break ground” by March 31. If not, Wheeler wrote, OSHA requires an interior stairway be widened and an electrical panel be made accessible.

  19. In today’s NFNews: “OSHA: Buy Land for liquor store or else”

    OR ELSE what? Do the $125,000 needed repairs?

    Sounds like a good interim position to me , instead of the multi-million $$$ “solution” of a new liquor store on a different location … and especially considering Ms. McBrides caution of the hard economic times ahead for the city budget.

    Spending 125K now to make the building more workably safe for the staff now, and commercially viable when/if the city wants to move on and then sell this current site, makes good business sense.

    Actually sounds like more than a good interim position, sounds like a “no-brainer” !

  20. I agree, Kiffi. I’d rather see the Council spend $125K now instead of gambling on a new liquor store during uncertain financial times.

    And I’d rather have the new Council make longer term decisions about the liquor store.

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